To your basic point I agree. Free is an opportunity, but only if approached thoughtfully. One thing is certain Free is not one size fits all and for that reason alone evaluating a business strategy and marketing plan is as important as ever if making money from ones art is a goal. That being said most artist pursue art not for profit, but out of love for their craft.

Many of Cory's quoted comments are concerning to me as they're generalities that don't necessarily hold true.

I disagree with Cory Doctorow on art as a profession. Over the ages there have certainly been numerous starving artists, but there have always been artists that have made a living from their work. Popular culture often defines who is most recognized in their day and later historical pundits gauge who has a lasting impact driving up the value of scarce work. Clearly they're not always the same. I think its a disservice to other artists to make a call to raise the white flag and just give work away. While I understand that is not his sole view on the topic the sound bite clearly makes it sound that way.

What really makes me strongly disagree is that most people (apparently even other artists) are unaware that the most successful artists are the ones that work the hardest. They're not riding on their laurels they're busting their ass. Their recognition and ability to make a living is very well deserved and earned.

I also disagree that contemporary artists “have” to come to terms with copying. On a technical level copying is part of the equation, but how freely you let people copy your work and what you allow them to copy is a strategic choice. Books do not operate in an economy of scarcity, but abundance. The same cannot be said for every other art medium. Clearly Corey has shed some light to his strategy. It works for him and his artistic medium and thats great. I'm sure on many levels that strategy could work for others, but it undoubtedly will not work for everyone or every medium.

You're dead on… attention is scare and compounding that problem is the amount of noise people have to filter. This is true of every marketing medium. When everyone gives their work away for free will everyone be on equal footing? Clearly not. The noise level will be so great that even free won't distinguish an artist from his/her peers. It will always come down to the quality of the work, the creativity in marketing that work and how hard an artist works. While free is an opportunity it is not a solution and with out proper planning it most certainly can be a disaster. In fact it might just be a safe prediction that everyone jumping on the free bandwagon will just expedite the process of pushing more people into obscurity. Early adopters will benefit from increased exposure and everyone else will just languish.

The economy of attention and reputation might just fall in line with the financial economy we currently see where only a select view become “rich” from free while everyone else is attention, reputation or financially poor.

Free may very well be the Emporer's new clothes. Time will tell.

Free isn't a new world order, just an easy name to the economic realities content faces in today's world.

Any tactic, widely copied, fails in the end. Thus, adopting free, blindly, for everything, without thinking of how it differentiates you from the market, won't work. Same as any business tactic. As I've said before, “Copying tactics without recognition of the choices, incentives and actions of other actors and the second-order impacts of your own tactics: that’s not strategy.”

The obscurity and languishing that results when people jump on the free bandwagon? That's a function of competition, not just “free”.

There are many, many ways to use a pricing tactic of free in one's overall business strategy. Nobody says free has to be used for everything, for everyone, for every medium.

But the only way to truly learn will be to try.

“Books do not operate in an economy of scarcity, but abundance. The same cannot be said for every other art medium.”

I don't understand. How are books different?

My point was that certain products generate greater revenue through large volume of sales. This is true of books, music, videos and most other widely distributed art. Photographic prints on the other hand you can sometimes make more by selling less in the form of limited editions. The same could be true of limited edition fine art books, paintings, sculpture, etc. Controlling supply is often the best form of generating higher prices when their is a good amount of demand.

The irony is that when it comes to art the most widely sought after collectibles are often an artists earliest work. In the past that used to be because these items were the rarest. If free establishes itself in the art world it'll be interesting to see how it effects this historical trend. Odds are there will be an artist who is unplugged that will be the darling of the art world simply because he/she never took part in free and the “new paradigm”.

For the rest of us who look to make the bulk of our income while living or in a contemporary economic/technological environment we'll see how things play out in the here and now as the economic model of free matures.

Umair Haque was missing from this. So…

“What is free? A business model – as the post suggests? No! It's just a pricing strategy.

But it's a very powerful pricing strategy.

There's a very simple reason almost all businesses dependent on complex network effects ultimately shift to free pricing. These aren't just 2.0 plays – in fact, free pricing can be seen at work across media, software and increasingly, consumer goods, pharma, etc. The reason is that there are powerful increasing returns dynamics at work.

In other words, free maximizes the potential for value creation.

Now, capturing value from “free” pricing is where we get stuck. How can we profit if something is “free”? The trick is that “free” isn't the business model; it's not even the profit model – it's just one end of how we price things.

So, to capture a share of the value we've created, we can take many paths. We can shift to services, we can resell consumption, etc.”

http://www.bubblegeneration.com/2007/03/how-not…

Found via Taylor Davidson's Bookmarks on Delicious ;-) http://delicious.com/trd8n/?page=9

The power of a public conversation, demonstrated.

Note that Umair's post was from March 2007 :)

And, for more specifics about strategy, tactics, “free” and photography, my post from Oct 2008: http://www.taylordavidson.com/writing/2008/10/1…

“Controlling supply is often the best form of generating higher prices when their is a good amount of demand.”

Depends on the price elasticity of demand and supply for that product, basic economics of supply and demand. This applies, btw, to anything, books and photographic prints included. Not sure how this applies to a “economy of scarcity, but abundance”.

Here's the danger: if we fight copying content that can be copied, attempting to control supply can lead to dangerous, short-sighted business decisions (see music industry, RIAA, suing fans; see remixing, issuing takedown orders for fans' remixes; see AP and DRM for news). If you don't read Mike Masnick at Techdirt, start. The tests and lessons from CwF+RtB should be required reading and analysis for any photographer. Or perhaps I'll translate them someday.

“Odds are there will be an artist who is unplugged that will be the darling of the art world simply because he/she never took part in free and the “new paradigm”.”

I'm sure we'll see it; but it is because they didn't use free or because they were highly differentiated from the rest of the market? That has nothing to do intrinsically with “free”.

An artist's early work could be sought after because it's rare; if an artist's early work that's was distributed for free is no longer rare (and beware of equating free as being abundant forever), than collectors will find something else about their work that is rare to value.

“Free” has always been in the art world. It's just a more applicable and useful pricing strategy for a wider set of products than ever before. That's why we pay more attention to it now. But free, and the economic trends that have pushed it into our contemporary consciousness, has also given us more opportunities to differentiate content while still using free as part of our overall business strategy.

I'm much less interested in seeing how the “economic model of free” evolves, much more interested in seeing (and helping) creative people and companies develop great ways to use free in their business strategies.

For us living in today's contemporary climate, that is the fun :)

Your blog is a great example of quality content for free (but you're right, it's not freemium :)

The odd thing is that most people that create content either a) reject the notion of free and posit that “free” will destroy society and creative content or b) think of free as the solution to all their ills, the best strategy for everyone, for everything, and that everything will be free in the future.

And answer, as we both agree, is neither :)

The caveat to this discussion is of course that there is demand. If there is demand then there is certainly revenue generating opportunity in controlling supply.

I'm not out to say one approach is right and the other is wrong. I just find that people tend to latch on to the notion of free with out really thinking it through. I also find that people think its some form of magic bullet and we should all know there is no magic bullet.

Its fair to say that with out value there will be no demand. As you pointed out on my blog my writing is a form of free. No difference of opinion there. My blog is a teaser for my photos that are sold and a gateway to services for workshops or teaching. It's a calculated effort. Even still it takes discipline to keep it from distracting me from other revenue generating tasks. There in lies the big dilemma for many who provide anything for free. Discipline and planning are the name of the game. Free is the buzz of the day. As with all things pricing related… tread and plan carefully.

It's on that front we also agree. Deciphering the approach and means to harness free is the fun… well fun for us who like to decipher such things. It's all relative.

Great conversation on the tactic. I like your approach of moving to figure out how to leverage the opportunity presented by the digital distribution channel rather than fighting it. My guess is that we have not seen the end of DRM simply because so many economic interests are having significant difficulty surviving the cash flow shifts. However, it is in the interest of significant profitable players (the pipelines and hardware mfgs) who are benefiting from 'free' content to keep information flowing relatively smoothly. (And personally, I'm thinking freedom of expression may trump DRM for democracy's sake.) Doctorow's utilization of free digital to promote hardcopy will probably be a short lived tactic as we become more comfortable with electronic books and the devices improve (Once again – a tech device stealing the cash flow from a pulp product). But that is besides the point. It works for now. The next guy to become famous will figure out what works for then, and so on. To a certain extent it is the responsibility of the old guard to defend apparently outdated business tactics and milk them for cash flow. That's why so often when there is a tech revolution only a few old guard players survive the transition.

One thing that I think is often overlooked about free models is the concept of marginal costs. Most of what I've read about free revolves around the marginal cost of supplying a good to be zero or at least near zero. This certainly simplifies one's decision to pursue free even though this assumption often doesn't hold. Malcolm Gladwell did a great job illustrating these costs in his recent New Yorker rebuttal to Free. However, I think what's important is that the costs, whatever they are, are likely displaced from the seller. Effectively, that makes them seem like zero. I think free gets interesting when marginal costs are not near zero for the seller.

This too is not an entirely new concept as retailers have used loss leaders for years. However, I think it gets especially interesting when free is combined with a dissolution of intellectual property. For instance, in professional services, free can almost be an analogue to open source. By using free to develop intellectual capital in a free environment, opportunities arise in secondary markets for mature ideas (eg freemium or something like that). Clearly care has to be taken as selling too many things where marginal costs exceed marginal revenue is a failed venture. However, it's also possible we've been overcounting certain costs (at certain times of the product development cycle) and therein lies an opportunity.

Your blog is a great example of quality content for free (but you're right, it's not freemium :)

The odd thing is that most people that create content either a) reject the notion of free and posit that “free” will destroy society and creative content or b) think of free as the solution to all their ills, the best strategy for everyone, for everything, and that everything will be free in the future.

And answer, as we both agree, is neither :)

“The next guy to become famous will figure out what works for then, and so on. To a certain extent it is the responsibility of the old guard to defend apparently outdated business tactics and milk them for cash flow. That's why so often when there is a tech revolution only a few old guard players survive the transition.”

I don't think I could say it any better :)

To think about price without thinking about cost (especially marginal cost) is madness.

But you're right, many debates about free often leave out an analysis of marginal costs; another bit often lost is that some products can be priced below marginal cost as long as total profitability works out (e.g. loss leaders, as you point out).

That said, I notice I didn't mention marginal costs once in this post or the comments; but that's because I've written about marginal costs and “free” in other posts about freemium and how to leverage free, and Jim and I talked about marginal costs in the comments to his post about the “marginal cost of creativity”.

(btw, if you want a better analysis of Free than Gladwell's check out Mike Masnick and Alan Patrick. Real economics.)

And I agree with your take on the ability to use free to develop intellectual capital: it's a concept I discussed in a post last year about my fremium life.

The problem comes in counting the full marginal costs and benefits of our actions, few metrics have the robustness to account for the impact of the free intellectual property we supply to the world. Focusing on value, instead of profit, is the real opportunity.

To think about price without thinking about cost (especially marginal cost) is madness.

But you're right, many debates about free often leave out an analysis of marginal costs; another bit often lost is that some products can be priced below marginal cost as long as total profitability works out (e.g. loss leaders, as you point out).

That said, I notice I didn't mention marginal costs once in this post or the comments; but that's because I've written about marginal costs and “free” in other posts about freemium and how to leverage free, and Jim and I talked about marginal costs in the comments to his post about the “marginal cost of creativity”.

(btw, if you want a better analysis of Free than Gladwell's check out Mike Masnick and Alan Patrick. Real economics.)

And I agree with your take on the ability to use free to develop intellectual capital: it's a concept I discussed in a post last year about my fremium life.

That said, I notice I didn't mention marginal costs once in this post or the comments; but I've talked about marginal costs and “free” before:

- Jim and I talked about marginal costs in the comments to his post about the “marginal cost of creativity”: http://www.jmg-galleries.com/blog/2009/07/22/th…
- how to leverage free: http://www.taylordavidson.com/writing/2008/10/0…
- freemium and intellectual capital: http://www.unstructuredventures.com/uv/2008/12/…

[...] streams have been filtered off or destroyed by technology. And many perspectives in-between. Taylor Davidson at Unstructured Ventures makes the argument that “Free isn’t a problem, Free is… which is the reverse of what many photographers and digitized managers are probably thinking. The [...]

[...] Free isn’t a problem, it’s an opportunity. [...]